Scandal-Plagued City of Paterson Faces New Corruption Claims

Officials in the New Jersey city of Paterson are calling for a criminal investigation into the city’s tire recycling program amid workers' claims of corruption and mismanagement there. Chief Investigative reporter Jonathan Dienst has more.

(Published Tuesday, Feb. 21, 2017)

Officials in the New Jersey city of Paterson are calling for a criminal investigation into the city’s tire recycling program amid workers' claims of corruption and mismanagement there.

Four city workers tell the I-Team that some tire firms are paying bribes in order to dump thousands of tires for free or for less than what the city normally charges, and the workers allege that taxpayers are shouldering the costs for it.

They all spoke on condition of anonymity for fear of retaliation.

"I’m just tired of the corruption, of the taxpayers being robbed, of the city being run into the ground," one DPW worker told the I-Team.

Residents Outraged by Paterson Tire Scandal

The city requires businesses to pay fees of $1 to $5 for each tire taken to the Paterson yard for recycling, but another DPW worker alleges it's a "scam" that winds up being "very lucrative for the yard guy -- in a week, he can make $400 or $500, maybe more."

Workers say some tire firms are even allowed to dump tires during overnights or weekends to avoid detection.

"They may pay for 10 or 20 tires, but they dump thousands on cost of the taxpayers. Thousands," said another DPW worker. "They dump every day."

When a third worker was asked if he personally has seen cash payoffs made to some DPW workers or supervisors from tire businesses, he affirmed, "Several times."

The worker who said he witnessed the daily tire dumps alleges the corruption involves several employees and supervisors.

"They're all in cahoots," the worker said. "They allow this dumping to go on. This goes all the way to the top … and there should be some kind of investigation for the taxpayers."

Lafayette Tire is one firm seen repeatedly dropping off dozens of tires per visit to the Paterson yard. Video of a truck from the company shows dozens and dozens of tires piled high, and DPW workers say Lafayette Tires often makes multiple daily deliveries of used tires.

"We call it the clown truck," said DPW worker no. 3. "We just be amazed how they can tie all those tires together without one falling off into the street causing an accident. 'Here comes the clown truck.'"

But city records show that on the same day that Lafayette dumped the dozens of tires, the company made just two separate $20 payments to the city.

"That’s too much. Imagine two years. Imagine 5 years," said one worker.

While residents can drop off four tires free of charge, and city cleanup crews do occasionally collect abandoned tires off roadways, DPW workers claim it is the improper dumping of thousands of tires by tire businesses that is behind the disparity.

Mayor Jose "Joey" Torres declined a request for an interview for this story. In an email, he said the city’s business administrator would conduct a review.

Paterson's business administrator, Nellie Pou, said in a statement to the I-Team Sunday: "I have directed the DPW Director and the Recycling Coordinator to review the procedures for disposing of tires pursuant to our City ordinance and to provide me with the system of controls that ensures that the appropriate fees are collected."

After additional questions from the I-Team on Tuesday morning, Pou said the city was calling for a criminal investigation.

"We appreciate WNBC bringing this serious matter to our attention. We are very much concerned about taxpayer dollars not being wasted as well as the potential for damage to our environment by improperly disposing of tires. These allegations have been referred to the proper law enforcement authorities and are now under investigation."

David Velazquez, the former head of the New Jersey FBI, agreed to review documents and video obtained by the I-Team as well as the claims made by the four city workers.

"What’s going on in Paterson is outrageous," said Velazquez. "It cannot be allowed to continue and it forces the hand of law enforcement to take investigative action."

Two corruption investigations are already underway in Paterson: the FBI raided City Hall last year in connection with questions about misuse of federal grant money tied in part to a prisoner re-entry program. And the state attorney general is investigating whether Mayor Torres improperly used DPW workers for private work at his home and a relative's business.

No one has been charged, and the mayor and numerous city workers have denied wrongdoing.

Hours before the I-Team's report on corruption allegations surrounding the tire program went to air Tuesday, FBI agents were back at Paterson City Hall conducting another search. An FBI spokesman would not comment as to what information agents were seeking.